Fact based stock research
Japan Steel Works (TSE:5631)

JP3721400004

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Japan Steel Works stock research in summary

jsw.co.jp

ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), Japan Steel Works (Industrial Machinery, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Japan Steel Works are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives). But they show above-average growth (Growth Rank of 59) and are safely financed (Safety Rank of 61, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 49, is a hold recommendation based on Japan Steel Works's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Japan Steel Works exhibits low value (Obermatt Value Rank of 43), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 59). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 61) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	43
Growth Rank	59
Safety Rank	61
Combined Rank	49

Country	Japan
Industry	Industrial Machinery
Index	Nikkei 225
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Japan Steel Works

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	85	49	79	43
GROWTH
GROWTH	34	67	51	59
SAFETY
SAFETY	100	44	61	61
SENTIMENT
SENTIMENT	n/a	74	63	^new
360° VIEW
360° VIEW	n/a	69	96	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Japan Steel Works is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	85	49	79	43
GROWTH
GROWTH	34	67	51	59
SAFETY
SAFETY	100	44	61	61
COMBINED
COMBINED	87	58	82	49

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Japan Steel Works the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Japan Steel Works shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Japan Steel Works. Price-to-Sales (P/S) is 61, which means that the stock price compared with what market professionals expect for future sales is lower than 61% of comparable companies, indicating a good value concerning to Japan Steel Works's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 22, meaning that dividends are expected to be lower than for 78% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 56% of alternatives (only 44% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 72% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on Japan Steel Works's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Japan Steel Works could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Japan Steel Works looks like an expensive investment today. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	82	65	78	61
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	69	39	80	28
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	76	52	78	44
DIVIDEND YIELD
DIVIDEND YIELD	74	45	59	22
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	85	49	79	43

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Japan Steel Works; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Japan Steel Works shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Japan Steel Works. Sales Growth has a rank of 78 which means that currently professionals expect the company to grow more than 78% of its competitors. Stock Returns are also above average with a rank of 95. But Capital Growth has only a rank of 11, which means that currently professionals expect the company to grow its invested capital less than 89% of its competitors. Profit Growth is also low, with a rank of only 40, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 95% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	12	77	51	78
PROFIT GROWTH
PROFIT GROWTH	64	63	65	40
CAPITAL GROWTH
CAPITAL GROWTH	n/a	3	61	11
STOCK RETURNS
STOCK RETURNS	78	87	11	95
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	34	67	51	59

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Japan Steel Works.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 61 (better than 61% compared with alternatives), the company Japan Steel Works has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Japan Steel Works is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Japan Steel Works. Leverage is at 50, meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors. Refinancing is at a rank of 57, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Finally, Liquidity is also good at a rank of 70, which means that the company generates more profit to service its debt than 70% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 61 (better than 61% compared with alternatives), Japan Steel Works has a financing structure that is safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Japan Steel Works but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	90	36	48	50
REFINANCING
REFINANCING	66	65	89	57
LIQUIDITY
LIQUIDITY	100	42	53	70
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	100	44	61	61

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Japan Steel Works and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	80	95	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	38	32	^new
MARKET PULSE
MARKET PULSE	n/a	52	37	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	74	63	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Japan Steel Works.
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